I last wrote about New Zealand’s offsetting market in 2012. Three years later, I’ve come back to a planning workshop led by two of New Zealand’s experts on biodiversity offsetting policy and implementation: Dr. Marie Brown, and Dr. Graham Ussher. I’m keen to know what’s happened recently, and where trends might be headed.
Since commencing her research five years ago, Dr. Brown feels New Zealand policy and methodology around biodiversity offsets has seen significant progress. We’ve seen the completion of the Department of Conservation’s Offset Research Program and publication of the resultant Guidance and Assessment Documents this year.
We’ve seen the country’s second-generation District Plans come to include provisions for biodiversity offsets, some District and City plans include standards, and case law has continued to codify process and implementation with each consent and offset passed. Ideological arguments against offsetting full stop certainly continue to linger, but New Zealand now has a range of good policies and guidelines to go ahead and allow those who do it, do it well.
Dr. Ussher asks if the horse has metaphorically bolted anyway – we now have over 20 major development projects that have incorporated biodiversity offsets as part of their consent, and a stream offset program operational in our largest city, Auckland.
Of course, there is still plenty of progress to be made. Once offsets are implemented, attention turns to monitoring and compliance. Since her thesis highlighted inadequate compliance in some sectors (such as agriculture), Dr. Brown sees that attention is definitely being turned to the monitoring and compliance topic, and she notes that planning documents across districts, regions and cities are certainly improving in this way. But it’s hard to tell if that’s translating to better conservation outcomes on the ground just yet. The mindset to deliver a good, effective offset:
“It’s never the what, it’s the how” says Dr. Brown.
An interesting compliance and monitoring statistic: the highest compliance rate was seen in the energy sector (near 100%), and the lowest (around 8%) seen in the agriculture sector. Mindful that these thesis results are only a snapshot from research from 2010, it does indicate that compliance is going to be different across different sectors. That snap-shot starts a conversation around where to put compliance efforts in the future, and where the work we have to do lies.
PhD Thesis, Dr. Marie Brown – Towards Robust Exchanges: Evaluating Ecological Compensation in New Zealand
Arguably the biggest developments in offsetting in New Zealand recently have been in terminology. Without a purpose-built regulation, offsetting has been substantially built by case law, and recent court decisions have marched on steadily in recent years Most recent case law has provided clarity to definitions and categories used, which in turn has gone on to influence assessments of impacts and their offsets.
The first clear definition: mitigation is not offsetting. Mitigation is now considered to be activities occurring within the footprint of the impact – those covered by terms such as avoid, remedy, repair, remediate and restore. Offsets are activities over and above these, and occur outside the impact footprint, on the same section of land as the development is occurring, or offsite.
Laid down by the High Court decision over the Escarpment Mine project, distinction between offset and mitigation has been a significant step towards better managing the ecological risk around New Zealand offsetting, and indirectly tightens up how the Mitigation Hierarchy is applied here (see my upcoming article Do we use the Mitigation Hierarchy in New Zealand? for more on this topic). By making such a clear offset-is-not-mitigation, it closes the door on being able to use an offset as a shortcut past avoiding, remedying or restoring damage as a first port of call.
The second big distinction: compensation is not offsetting. Compensation is now clearly defined as an out-of-kind quantified ‘positive’ act agreed on a case-by-case basis. In the ground-breaking Transmission Gully resource consent case brought by the New Zealand Transport Authority for their Wellington Northern Corridor road project through Transmission Gully.
The EPA-mandated Board of Inquiry concluded, among other things, that compensation is distinct from offsetting, and activities sit in a ‘cascade of activities’. Since then, cases such as Mt Cass Wind Station and Meridian Energy, and The Escarpment Mine project and Buller Coal and Buller District Council, have reinforced this opinion. We now know how to use these terms in New Zealand.
This improved clarity has effects on the ground as it helps practitioners assess the activities proposed and put them into the sequence that respects international best practice as heralded by BBOP’s Mitigation Hierarchy. At each stage, New Zealand is working towards a framework that lets us compare apples with apples and focus on implementation, not interpretation.
Look out for the new assessment method
To compliment the improved terminology, a new assessment framework has been established by some of New Zealand’s most respected ecologists and biodiversity offset experts. Through the Environment Institute of Australia and New Zealand (EIANZ), The Ecology Impact Assessment (EcIA) Guidelines for New Zealand were released early in 2015.
The time had surely come to improve the scientific rigour, objectivity and consistency of assessments for offsets in New Zealand. As Dr. Ussher presented:
“Lack of standards = vulnerability to quality issues; no risk assessment framework currently exists”
The guide is intended to put together best practice in surveying, scoping, assessing importance etc. at impact and offset sites. It uses terminology that fits into a planning framework, and a matrix approach to determining results.
It will be interesting to watch the discussions around the document unfold, and see it applied to cases and offsets. Even with such a robust framework there are still likely to be discussions around the outcomes of assessment on a case-by-case basis, but at this provides a framework to use for discussions and assessment decisions. It’s a sorely needed step towards mainstreaming biodiversity offsets in New Zealand.
Future Offset Banking in New Zealand?
This week’s workshop showed New Zealand becomes more practiced in biodiversity offsetting, but commentary also highlighted that some problems will become more prominent, rather than less. For example, workshop leaders and audience discussed difficulties getting consent-holders interested in the long-term commitments required for perpetual biodiversity offsets.
Also raised were issues of time-lags between project impact and offset maturity, and small-scale impacts that would benefit from being able to contribute to aggregate offset options. Importantly, it’s becoming clearer we need a way to reward those who do pro-active or pre-emptive biodiversity management before their impact occurs.
From a policy perspective, Dr. Brown noted that there is clear potential for third-party offset providers to fill some of these gaps identified, and deliver better outcomes in offsetting situations. In monitoring and compliance, there are clear advantages to contracting out these responsibilities to dedicated entities – not the developers with businesses to run, nor the regulators with over-stretched institutional capacity.
Ussher went on further to point to the next step – Biodiversity Offset Banking (or BioBanking). He says there is plenty of demand from project developers to pre-emptively conserve and manage biodiversity before impacts occur, so there is a clear case that New Zealand will need to move towards incorporating a banking model in the future to truly capitalise the potential in biodiversity offsetting.
New Zealand is certainly gaining steam in biodiversity offsetting, and seeing that we’re not yet at the top of our game internationally, one would predict there is plenty of room for growth in this area. True environmental markets in the form of an Offset Banking system are not here yet, but are sitting on the horizon with the path clearing year by year. Watch this space.